CeWe Color continued on its impressive path of growth with the CeWe Photo Book in the first quarter of 2009: with an increase of 57.8 percent to 647,000 CeWe Photo Books (Q1/2008: 410,000 books) the market share was clearly expanded. “Growth is even higher when it comes to turnover. Market researchers are forecasting that turnover on the European market will grow by 35 percent in 2009. Our success in the first quarter means that we are growing stronger than the market and we have reinforced our position as the European market leader in the market for photo books, which is so vital for us, says Hollander.
Internet business increases by 29 percent
In the first quarter of the year the total number of photos fell by 4.8 percent to 504 million photos due to a seasonal shift. The number of digital photos (incl. CeWe Photo Book prints) nevertheless increased by 13.3 percent to 391 million photos. This means that as many as 78 percent of all the photos developed are digital. More than 50 percent of these digital photos were ordered in the Internet. Rolf Hollander: “We have increased online sales by 29 percent We are thus setting very high standards in terms of sales figures for many Internet companies in our sector.
Transformation-related restructuring completed
With the plant closures in Paris and Teplice (Czech Republic), a phase of restructuring which lasted several years and reduced annual profits by an average of EUR 10 million a year over the past five years, hence almost halving these profits, has been completed. The elimination of these restructuring costs will increase earnings as of 2010.
Sales and earnings according to plan
Turnover in the first quarter fell slightly, by 1 percent to EUR 81.7 million. This is due to a change in the seasonal nature of the business: for years now the Christmas quarter has been gaining in significance through CeWe Photo Books and other photo gift articles – at the expense of the first three quarters. Restructuring in Paris and Teplice meant that CeWe Color posted EUR 9.4 million in restructuring costs in the first quarter, as the company had previously announced. Q1 2009 earnings before tax (EBT) were hence negative by EUR 15.5 million. EBT before restructuring was negative at EUR 6.2 million (Q1/2008: – EUR 4.5 million). This figure contains initial losses for the introduction of commercial printing and additional investments in marketing and research & development in order to further expand business conducted with CeWe Photo Books.In future the new CeWe business segment of commercial printing will not fully compensate for seasonal losses, but it will reduce them, says Hollander.
Free cash flow rises by EUR 3.3 million
In the past seven years the company has invested a great deal in new digital technology and has in the meantime largely replaced conventional machines and equipment. This wave of investments is now receding. This is why cash flow rose by EUR 3.3 million to – EUR 8 million in the seasonally problematic first quarter. “This is the best Q1 cash flow in five years,” says Hollander.
Commercial digital prints new growth segment
CeWe Color is achieving great success in its range of digital print services for consumers with its CeWe Photo Book and has progressed to become the largest supplier in the field of first-class quality digital prints in Europe. Commercial users such as corporations and small business are now to be able to benefit from this range of services as well. CeWe began to open up this market with the acquisition of diron six months ago. Rolf Hollander: “The initial integration phase has now been completed and we have commenced with production for commercial users.”